Money4 min read
Pricing your product or service
Price on the value you create, not just your costs.
Most new founders underprice. Low prices attract price-sensitive customers, shrink your margin, and make it hard to grow.
Three ways to think about price
- Cost-plus: your cost plus a margin. Sets a floor, not a target.
- Competitor-based: what alternatives charge. Shows the range customers accept.
- Value-based: a share of the value you create (money saved or earned, time saved). Usually the best guide.
Practical tips
- Know your cost per sale and keep a healthy margin (services often aim for 50%+, products depend on the category).
- Offer 2–3 options (good, better, best) so customers compare options instead of deciding yes or no.
- Raise prices when you're consistently busy or most prospects say yes without hesitating.
- Ask for payment upfront or a deposit wherever possible.
Pricing is a test, not a forever decision. Start, measure, and adjust.